Leonardo Kamilius is not your typical 25-year-old. He went from being a business consultant at a prominent company to leading a microfinance institution that supports more than 140 small and micro-businesses in Cilincing, North Jakarta. He helps people like Siti Warningsih, pictured with Leonardo, who runs her own ‘warteg on two wheels,’ by offering them microcredits to start up businesses.
Today, Leonardo tells us why he turned his back on a promising career and a good salary to help those less fortunate.
Tell us about your microfinance business.
It’s called Koperasi Kasih Indonesia and I began it in January 2011. We are already helping around 140 small businesses ranging from becak drivers and food hawkers to mobile tailors.
We provide loans ranging from Rp 300,000 [$35] to Rp 1 million. We charge weekly installments and so far we haven’t had any defaults.
What sets you apart from the many other microfinance institutions out there?
Rather than just providing loans, we also focus on educating our borrowers about how to manage their finances. Most of the people we deal with have never saved their money in a bank because they think it is too much of a hassle. They would literally put their money under their pillow. This leads to them spending it all, often in ways that are not effective, and so they have no savings.
So how does the business work?
I’ll give you an example. People who borrow Rp 1 million pay a weekly installment of Rp 50,000, which they pay 25 times over a six-month period. The extra Rp 10,000 a week is divided into two, with Rp 5,000 considered the interest and put into the cooperative’s account for operational expenses, and the remaining Rp 5,000 put into the borrower’s savings account.
How many employees do you have?
Seven in total. Three managing it, including me, and four field employees.
What drove you to do this?
Right after I graduated from University of Indonesia, I went to work for management consultancy McKinsey & Company as a business analyst. My career was taking off. By 2009, I’d been there just over a year and been promoted, then an earthquake hit Padang in West Sumatra.
I decided to go to Padang for two weeks to volunteer and help the victims. I can’t recall what prompted me to go, I just felt I had to do it. I’ve always believed in God, and that he guides our actions. I was waking up every day in Padang and doing nothing but helping people. I’ve never felt more alive. After I came home, I felt I’d lost my passion for my old job because I wanted to do more to help others and that job did not allow me to do that. So my performance started going downhill and I was let go by the company. I received offers from several rival companies, but I opted for what I thought was the more challenging career rather than taking the ‘safer’ option.
So what’s the difference between working for a big business consultancy and your current job?
Well, now my office is in Cilincing, which is not one of the nicer parts of Jakarta. My current office used to be an old storage room and it’s full of mosquitoes. If I had chosen to work for a similar company to my old one, I’d probably be enjoying a fancy lifestyle. Instead, I’ve had to find the initial investment for the cooperative and, because it has only been running for three months, it has yet to provide me with any income at all. So I have to live off my savings, and make sure that I spend my money accordingly.
So I bet your lifestyle has changed dramatically then?
Yeah. I used to spend Rp 1 million on a pair of shoes, but now I realize I can put that money to better use by helping others in need. That amount of money can provide a better life for an entire family if I lend it and they start up a small business. But I enjoy every minute of it. When I worked as a business analyst, I couldn’t wait for the weekend to arrive, whereas now I want to work all the time, helping the people of Cilincing.
How do you make sure that the borrowers pay their loan installments?
We focus more on providing incentives rather than penalties. For example, even though we could resort to legal action, we prefer to reward on-time payments by increasing the size of the loan and providing long-term loans, such as for housing and education.
Which small businesses tend to fare best?
I think businesses related to everyday basic needs will hold up the best against the test of time, those offering food, transportation services and clothing.
You decided to get married at a relatively young age. How has that affected your work?
I’ve been married for about a year, and a lot of people said I must be crazy to quit my old job to do this, especially as I come from a family that is not considered ‘wealthy.’ But my wife has been supportive of me doing what I love best and what I’m most passionate about, and that has made me even prouder of my current job.
What are your long-term goals?
Before, I had wanted to have a long career in business and become a CEO of a well-known company. But now, I plan on becoming someone who is an idealist and can make a difference.
Leonardo Kamilius was talking to Irvan Tisnabudi.